I was facing same problem when I first connected my nexus 4 device to system and tried to run my android app on my device. Here is solution for this problem.
First you need to enable usb debug mode that cam be done by taping 7 time to Build number option under About Phone.
Now you need to go to Developer options which will be above About phone. Here you need to check USB debugging option and other settings as per your desire.
After above step you will see a new device in Device Manager with name nexus 4 but its drivers are not update so you need to update them by selecting browse my system and select folder <android-sdk-directory>\extras\google\usb_driver . This folder will be visible only if you already have installed ’Google USB driver”.
After updating your drivers your device will be visible in DDMS .